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More evidence, less poverty

IPA Consumer Protection Quarterly

Issue No. 15 – October 2024

Welcome back to the Consumer Protection Quarterly, IPA's newsletter on the latest consumer protection research across the globe. This newsletter is part of IPA's Consumer Protection Research Initiative

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(CPRI). Each quarter we send you the latest research, insights, and inspiration for financial consumer protection. If you have something to share, please reach out: [email protected]

mailto:[email protected]?subject=Consumer%20Protection%20Quarterly

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Be sure to check out the "What’s Next" section—we have some exciting news about the next phase of our Initiative!

You are receiving this email because of your past participation in IPA consumer protection or financial inclusion events, and/or because you signed up for our consumer protection practitioner's forum mailing interest list

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What's New and What's Next

What's New: Blog | Unlocking the Potential of Competition: Insights from Ghana's Mobile Money Market

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Mobile money markets are rapidly evolving, with new agents and products popping up every day. In Ghana alone, the number of active mobile money agents grew by 21 percent in 2023. But what are the impacts on the local economy—and on consumer risks—when new agents open up in a market? A new blog highlights five key insights from an IPA study in Ghana, where we are collaborating with two mobile money service providers to encourage randomly selected corner stores to begin offering mobile money agent services. While this research is still ongoing, our new blog by researchers Francis Annan and Chi Man Cheung shares insights from their baseline survey which gives us a better understanding of what’s happening in the Ghanaian mobile money market. Read more here

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Photo: A mobile money agent outlet that vends digital financial services (retail mobile money, airtime, SIM cards, etc.) in Krodua, Ghana. © 2023 Mary Appiah, GCB Bank PLC, G-Money

What's New: Blog | New Perspectives at the 2024 Responsible Finance Forum

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In July, Paul Adams, Director of IPA’s Financial Inclusion Program, attended the Responsible Finance Forum, a side event to the G20 Global Partnership on Financial Inclusion (GPFI), convened by the Center for Financial Inclusion. The event brings together new perspectives from digital financial service providers, investors, researchers, think tanks, and consumer bodies from low- to middle-income countries into the G20 GPFI process. Read more about Paul’s experience and key insights from the forum here

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Photo: Paul speaking at the event during one of the RFF discussions. © 2024 Center for Financial Inclusion

What's New: Blog | Hidden Fees Highlighted by Hidden Researchers: A Citizen Science Approach to Detect Overcharging in Digital Financial Services

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How can researchers use a citizen science approach to figure out if customers are being overcharged by mobile money agents? That’s exactly what IPA tested in Uganda and Bangladesh. The term “citizen science” describes a unique way to conduct research: it uses members of the general public to help researchers collect data rather than relying on professional enumerators for data collection. We used citizen scientists to measure the extent to which mobile money agents charge unofficial fees for their services. To test the accuracy of this approach, we compared the data from these citizen scientists with data from more traditional, professionally trained mystery shoppers. What did we find? And is citizen science an effective methodology? Check out the blog by IPA’s Lauren Perlik and researchers Vardaan Chawla, Tomoki Fujii, Arpita Khanna, and Abu Shonchoy here

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to learn more.

Photo: IPA Uganda team learning to use the POKET app. © 2024 IPA

What's New: Financial Inclusion Week 2024: On-Demand & Live Sessions

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It’s officially Financial Inclusion Week for 2024 and this year’s event presents an industry-wide opportunity to reflect on how the inclusive finance sector has evolved over the past decade and what we need to do next to serve the nearly 2 billion people that remain excluded from the formal financial system. IPA has multiple on-demand and live sessions that you can check out this week. But first, register for free here

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. Sessions include:

Live

Balancing Growth with Responsible Digital Finance to Ensure Consumer Protection

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| 5 PM UTC on October 17: Hosted by IPA and CGAP, learn about how we collect data on consumer protection challenges, and how data can inform policy decisions with presentations by IPA’s William Blackmon and CGAP’s Eric Duflos, as well as a fantastic panel that included Kershia Singh, Sarah Corley, and Sheila Senfuma Nakanyike.

Using the DFS Standards to Address the Crisis of Customer Harm from Digital Finance, hosted by Cerise+SPTF

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| 12:30 PM UTC on October 17: Amelia Greenberg will share Cerise+SPTF's DFS Standards, guidelines for FSPs to help mitigate consumer risks. IPA’s William Blackmon will join panelists Sheila Senfuma Nakanyike, Wayne Hennessy-Barrett, and Alan Muñoz to discuss these emerging risks and promising solutions to address them.

On-Demand

Improving Consumer Outcomes: Designing New Tools for Regulators & Financial Service Providers

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: Hosted by Paul Adams and William Blackmon, hear all about IPA's Consumer Protection Research Initiative, with lightening presentations by Brian Mwesigwa, Lisa Spantig, Rafael Mazer, and Matthew Bird (along with stories written and performed by our AI assistant—you know you want to see what this entails!).

IPA's Transaction Cost Index: How Do We Measure Consumers’ Experience Using Financial Service Agents?

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: Hear all about IPA's Transaction Cost Index from researchers Francis Annan (UC Berkeley) and Brian Mwesigwa (IPA) focused on insights into cross-country variation in DFS pricing along with the prevalence of consumer protection concerns including agent overcharging, poor service quality, and limited service reliability.

Bridging the Gender Gap: Designing Credit Products to Empower Women’s Economic Growth

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: Learn about emerging evidence on how credit can promote women's economic empowerment and business growth. This discussion with Elizabeth Koshy, Emily Breza, and Cara Myers dives into how we can better target capital to meet women’s needs and address research gaps.

What's Next: IPA Launches Phase Two of Consumer Protection Research Initiative

We are excited to announce that in July, IPA signed an agreement with the Bill & Melinda Gates Foundation to extend our Consumer Protection Research Initiative for another four years!

We’re going to keep doing what we’ve done since the initiative launched in 2019: rigorously measure risks consumers face when using digital finance, and working with regulators, financial service providers, civil society organizations, and researchers to develop and test tools to mitigate these risks. We're putting a renewed focus on understanding the risks of credit, including both consumer and business credit, and understanding how risks differentially impact women and men.

To kick off the second phase of the research initiative, IPA is hosting an event in Nairobi, Kenya this month, where we will discuss the work accomplished thus far and what lies ahead for the future of CPRI—keep an eye out for outputs from that event.

We’re planning a new round of funding for projects that aim to develop and test tools that address these important consumer protection risks. We expect to launch a call for proposals next year, but please reach out now if you have ideas or partnership possibilities!

Things that Make Us Think

Report: Consumers are at the heart of consumer protection, but in low- and middle-income countries, consumers are often left out of the conversation about financial sector regulatory decisions. A new report from Consumers International centers consumers’ perspectives to produce an index that directly gauges the consumer vantage point (as represented by consumer bodies) across a broad framework of indicators relevant to consumer outcomes. The index covers four pillars and the findings show mixed results across the pillars, but progress in the index as a whole, with the overall index score rising from 41 in 2022 to 48 in 2023. If you want to learn more about the index, you can read the report here

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Resource: This summer USAID released their knowledge hub for digital development, which holds the most relevant country-level data and resources to understand the dynamic digital ecosystems of countries under one domain. Dig into the details on their new website here

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Blog: In 2023, as part of the WAEMU Digital Finance Consumer Protection Lab, CGAP, in collaboration with Omedia, conducted qualitative research to better understand customer profiles, loan usage, and drivers of late repayment. Through focus groups with borrowers, these qualitative results shed more light on the users’ experience and the possible causes of the late repayments. Below are some quick highlights of what the researchers found:

Though it’s often their first experience with formal credit, most respondents value digital credit and a large share of them develop a sense of loyalty.

The promise of instant money, however, attracts several respondents in financial distress

The lack of clear terms and conditions negatively influences consumers’ trust and on-time loan repayments.

There is, however, a learning curve for clients to make better-planned and informed decisions.

These insights highlight the need for improving consumer protection policies and have led the lending partner to test out the psychometric credit scoring of customers. You can read the full analysis of the findings here

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Working Paper: A new working paper from CGAP presents a conceptual framework for achieving a Responsible Digital Finance Ecosystem, where a wide range of actors—financial sector and other authorities, DFS providers, consumer representatives, and market facilitators—come together to safeguard consumers from potential harm and ensure that digital financial services enrich their lives. The paper outlines four key areas and uses real-life examples and case studies to put the framework into perspective for financial consumer protection. Check out the full paper here

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Blog: Why should inclusive finance be central to the climate response? Approximately, $4.8 trillion has been funneled into climate action but 75 percent of this went into high-income countries and less than 10 percent of these funds reached local levels. A new blog

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by Sophie Sirtaine focuses on how there is a clear global goal for more climate finance to go directly to low- and middle-income countries and those who need it most, but we are far from achieving this mission. Inclusive finance can be the most effective way to distribute climate finance at the grassroots level and enable a just transition and truly global climate action. Learn more about inclusive finance here

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Blog: A new blog from Karthik Venkataraman discusses his recent visit to Brazil where he saw a prime example of local innovation through Banco Palmas. Banco Palmas is one of Brazil’s first community development banks, which embodies embedded finance— community members can use financial services that are embedded within the real economy and, in turn, strengthen the real economy. Venkataraman highlights that Banco Palmas offers important lessons on embedded financial services for inclusion and impact. Learn more here

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Report: Unified Payments Interface (UPI) has become a popular way to complete payments for small-ticket transactions. However, this growth means we also need to monitor customer grievances and grievance resolution experiences. A report from Dvara highlights new research behind building an effective in-app Grievance Redress Mechanism (GRM) for UPI consumers in India. The research took place in three phases:

A deep dive into exploring and understanding the core issues users face during the grievance redress journey. This phase investigates on-field data to deeply understand constrained users’ challenges.

Translating the analysis and fieldwork insights from Phase 1 into a design process that creates the solution approach for the issues identified, in the form of prototypes.

Testing the efficacy of the solution approach on-field with constrained users, using the prototypes from Phase 2.

Check out the report here

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White Paper: Women entrepreneurs face significant barriers in accessing financial resources, but digital financial inclusion can help make entrepreneurship more accessible and equitable. That’s why Women’s World Banking introduced The Women’s Digital Financial Inclusion Advocacy Hub. The Hub focuses on four key pillars: access to technology, digital financial capability, digital financial services, and reliable data collection methodologies to track and address the unique challenges faced by women entrepreneurs in accessing and utilizing financial services. Read more about the nine key strategies from the Hub’s new white paper

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, which aims to advance women-led MSMEs through digital financial inclusion, empowering women’s economic participation.

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